Still, area assessors pointed out that results were mixed. In some counties, most growth in assessments came from the annual 2 percent increase for inflation allowed under Proposition 13. In all counties, thousands of properties were worth less than their previous assessed value – the purchase price plus inflation – because 1978′s Proposition 8 lets the assessment temporarily drop to match the fallen property value.

“Remember, property values plummeted so low that we haven’t come close to making up the losses we’ve experienced,” said Jean Hurst, legislative representative for the California State Association of Counties. “This is no windfall by any means, but it’s a function of the stabilization and the gradual uptick that economists tell us the recovery will look like.”

San Francisco, Santa Clara and San Mateo counties had the biggest increases in the Bay Area, and among the biggest in the state.

“We are clearly on the way back up,” said San Francisco Assessor Phil Ting, noting that it is the only county in the state that never experienced a downturn in its property tax roll over the past few years. “We believe this is probably the last year that many homeowners will be getting a reduction (of assessed value) because the market is coming back.”

Silicon Valley growth

Both San Mateo and Santa Clara counties said they benefited from Silicon Valley firms’ expansion.

“The resurgence here is being led by business,” said Larry Stone, assessor for Santa Clara County, where the overall roll was up 3.25 percent. “The office market is on fire. As spaces lease up, they begin to build out the insides.”

Once businesses lease space and add staff, they buy equipment. That was apparent in both counties as the category of “business personal property,” which includes machinery, computers and fixtures, rose 6.48 percent in Santa Clara County and 5.45 percent in San Mateo.

Still, both counties had tens of thousands of homes that were assessed lower.

“It appears we’re gradually pulling out of the slump,” said Mark Church, assessor of San Mateo County, where the roll rose by 3.33 percent. “We’re moving in the right direction, but we’re not there yet.”

Property tax revenue is split among schools, counties, cities and special assessment districts. The plunge in real estate values resulted in an even tighter budget crunch for those entities.

This year, after three years of minimal or negative growth, Santa Clara County, with the biggest roll in the Bay Area – reflecting the value of Silicon Valley businesses and affluent residential communities – saw an extra $9.7 billion in assessed value. At a 1 percent tax rate, that translates to $97 million more in tax revenue.

But in Solano, the worst-performing Bay Area county, the roll was down by 3.12 percent or $1.22 billion, meaning $12.2 million less in tax revenue.

Wide disparities were evident even within a single county.

Take San Mateo, for instance. Atherton, where the cheapest house for sale is asking $1.595 million, saw assessed values rise more than 9 percent, but in East Palo Alto, where many home values hover around $300,000, the assessments were down 2 percent.

“We’re seeing sharp contrasts between the high-end locations and the entry-level locations,” Church said.

East Bay moderate

In East Bay counties, increases were more moderate.

Alameda County was up 2.14 percent, just a tad ahead of the inflationary increase. “It’s going to take a long time” to fully recover from the downturn, said Brian Hitomi, chief deputy assessor.

Contra Costa’s 0.86 percent growth was largely due to an appeals board decision that increased the value of Chevron’s Richmond refinery for 2007, 2008 and 2009. The tax bump for all three years is reflected in the 2012-13 roll.

“It’s a one-time thing,” said assessor Gus Kramer. “Anyone who hangs their hat on that economically going forward is a fool.”

Contra Costa’s real estate market is basically flat, he said.

“The market is bouncing on the bottom and trying to recover,” he said. “There are some areas that are pretty healthy,” such as the affluent communities of Danville, Lafayette, Moraga and Orinda.

Likewise, the North Bay was fairly stagnant, other than Solano County’s 3.12 percent decline. With towns like Vallejo ravaged by the foreclosure crisis, Solano reduced assessments for more than half of all properties. Since 2007, its roll has fallen by 17.16 percent or $7.849 billon.

Napa County saw a 2.06 percent rise, “mostly due to the inflationary increase,” said Steve Schellhamer, assistant assessor. “Although it’s positive, it would be premature at this point to declare that we’re out of the slump.”

Marin nearly flat

Marin County’s assessed roll nudged up just 0.82 percent.

“The good news is that we don’t see things going dramatically south anymore,” said Assessor Rich Benson. “I don’t think it’s time to say that the market has turned around yet, but we’re seeing some positive indicators.”

He and other assessors pointed out that home sales have been robust throughout the spring. Since assessments for the 2012-13 tax year look at values as of Jan. 1, 2012, those stronger sales aren’t yet factored in.

Sonoma County, which got an extension to close its roll in late July, expects it to be flat.

“I hope we’re close to the bottom,” said Bill Rousseau, chief deputy assessor.

Property tax assessments slowly rise

For the 2012-13 tax year, property tax rolls in most Bay Area counties edged up, even while thousands of homes still had assessments temporarily reduced because their values had declined. Assessments consider value as of Jan. 1, so the recent surge in the real estate market is not yet reflected.

{+1} In billions

{+2} Under Proposition 8, passed in 1978, properties are temporarily assessed lower when their market value falls below their previously assessed value – the purchase price plus an annual increase of 2% or the California Consumer Price Index, whichever is less. When the market rebounds, properties can be reassessed to this “factored base year value.”

{+3} Sonoma County numbers are estimates; roll will close in late July.

Source: County assessors

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/business/article/Property-tax-assessments-gradually-bouncing-back-3690479.php

Like the market itself, the commercial real estate practice is rebounding from a deep low. Tech companies expanding into new digs and an uptick in off-market deals are helping keep big-firm real estate departments busy in San Francisco. Some are even thinking about hiring again, but stress they’re going to be very cautious — and choosy.

“I laid off a lot of people. It was very unpleasant,” said William Murray Jr., who leads the real estate practice at Orrick, Herrington Sutcliffe. He said his San Francisco group dropped from 18 to 12 attorneys because of the recession, and he doubts they’ll ever return to those pre-crisis levels. “My standards for hiring are tougher. I want to make sure I hire only people who can make it through another tough downturn.”

Murray said it’s not easy to identify those people and they are few and far between, but he said the ideal candidate will have experience handling the type of capital market transactions Orrick specializes in and can show they kept themselves busy even during the recession.

DLA Piper partner Stephen Cowan, whose own group in San Francisco dropped from 25 to 15 lawyers since the real estate bubble burst, echoed the sentiment. The pipeline at his firm has more promising matters than last year, including multiple portfolio transactions, purchase and sales deals, among them a purchase of 24 properties across the United States worth around $850 million, and a new redevelopment project in Mission Bay. “Every single person is busy,” Cowan said, ticking off the matters: “We’re doing more leasing, more financing, representing lenders and more borrowers.” His group’s even handling a large acquisition with no financing involved, he said.

But he’s not yet ready to claim a comeback strong enough to warrant a hiring surge. “Law firm management and real estate partners are very leery of the depth of the downturn,” Cowan said. The upturn could be a temporary blip, he said, and hiring won’t pick up until his firm is sure of sustained business. “Thinning the ranks is very, very painful.”

Orrick partner Michael Liever said his real estate group has been handling more work for tech companies buying campuses or leasing more space as they prepare to expand, such as Facebook Inc.’s move into the former Sun Microsystems headquarters. Most of the action is happening South of Market in San Francisco, he said, and in Menlo Park and Palo Alto. Orrick has represented two landlords in negotiations with Apple Inc. for buildings across the San Francisco Bay Area, for instance. Murray says the team has handled four $100 million deals in the past three to four months — mainly acquisitions of properties or portfolios of properties. “We didn’t have anywhere near that volume in ’08 and ’09,” Murray noted.

In March, Orrick handled the Westin San Francisco hotel’s restructuring, representing Westbrook Partners, which bought the debt on the property and took a deed in lieu of foreclosure on the property. Media reports put the mortgage debt at about $150 million.

Orrick’s San Francisco office added one fifth-year real estate associate from a Chicago firm a month ago and a first-year is starting at the end of August. The firm will be hiring one or two more lateral associates in the fall, partners say, if the deals keep coming. The ideal candidate these days will have just the right mix of experience and fire in the belly, Murray said. “There are people that have a hunger and that love real estate and I think they end up surviving better,” he said.

Gibson, Dunn Crutcher, known for caution in lateral hiring in good times and bad, is also beating the bushes for the perfect candidates to add to its 14-attorney San Francisco real estate group. Firm Chairman Kenneth Doran said demand in real estate has surged. Gibson is in a different position than many of its peers, Doran said, because it didn’t lay off any attorneys during the downturn. This year, the firm added one of counsel in Los Angeles and is in the process of hiring another in San Francisco. “We are cautious and selective,” Doran said.

Charles Thornton, a San Francisco partner at Paul, Hastings, Janofsky Walker, said clients are still risk averse. He said he has more off-market deals in the works than usual, which aren’t subject to a public bidding process. Two are acquisitions of office buildings and two are other types of commercial properties, all in California. “You sign a confidentiality agreement,” Thornton said. “You negotiate directly.”

Thornton said he’s not sure why more negotiations are happening behind closed doors now. One driver might be the complexity of deals these days, and various pressures on sellers. The loans attached to a property may be in default, there may be issues between the borrower and the lender, or a seller may have a deadline to get certain assets off its books in this fiscal year.

All those factors make turning to a single reputable buyer more appealing than a public bidding process that tends to be more fraught with risk, including the risk the deal won’t close or will be negotiated down in price after the buyer has done due diligence, Thornton said.

Generally speaking, Thornton said, the hottest properties today are office buildings in major markets, like Silicon Valley, San Francisco and L.A., that are fully leased to credit-worthy tenants.

Joan Story, a real estate finance partner at Sheppard, Mullin, Richter Hampton in San Francisco, said work has picked up on the transactional side since last year, but certain areas continue to be hit and miss, especially on bigger projects. Story said residential development on the urban fringe will take a lot longer to recover. That — and the uncertainty many still feel about the permanence of the upswing in commercial real estate — has kept Sheppard’s San Francisco group steady at 17 real estate and land use lawyers. One new first-year associate will be coming on board from the firm’s summer program, but no one’s been added laterally so far this year. “We’ve not talked yet about any lateral hiring in the San Francisco office,” she said.

What would it take for the firm to jump-start hiring? “More deals,” Story said. “A sense that the pickup we see is not just sporadic but is sustained. I guess nobody really believes it yet.”

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Article source: http://www.law.com/jsp/article.jsp?id=1202506643112&Real_Estate_Coming_Back_but_Firms_Still_Cautious_on_Hiring

Optimistic: “There’s a sense that things are getting better,” says John Carpenter.

An uptick in deals and tenant activity has yet to push the Tri-Valley office market out of the stagnant state it’s been in the last several quarters.

Still, with office leasing increasing at a rapid pace in San Francisco and the Peninsula, secondary markets like the East Bay could start picking up speed.

“There’s a sense that things are getting better,” said John Carpenter, principal of tenant representation brokerage Carpenter/Robbins Commercial Real Estate Inc. in San Ramon. “That sense is really derived from the markets in San Francisco and on the Peninsula that are getting better very rapidly, but we …

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Article source: http://www.bizjournals.com/sanfrancisco/print-edition/2011/05/20/bay-area-office-deals-may-lift-up.html

Pleasanton, CA (PRWEB) May 01, 2011

Home sales in the nine-county San Francisco Bay Area continued at a steady pace in the first quarter of 2011 compared with the same period a year ago as homebuyers took advantage of favorable home prices and interest rates, according to an analysis of MLS data issued by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.

In the nine-county Bay Area, 10,519 existing, single-family detached homes changed hands during the first quarter of 2011, a 1 percent decline from 10,617 homes sold during the same period in 2010. The first-quarter figure was down 11 percent on a non-seasonally adjusted basis from 10,753 homes sold in the fourth quarter.

Steady demand for lower-priced homes from investors seeking bargains and renters who discovered it can cost less to own than it does to rent kept home prices relatively stable for yet another quarter. For the region as a whole, the median price of a home sold during the first quarter was $468,360, down 3 percent from the same period a year ago and 11 percent lower than in the fourth quarter, when the median price rose slightly behind an uptick in sales of higher-priced homes.

Three counties – Alameda, Contra Costa and Santa Clara – each accounted for more than 2,000 home sales during the quarter but experienced slight declines in the number of homes sold on an annualized basis. Meanwhile, the two counties that typically contribute the fewest sales – Napa and Marin – showed the greatest improvement by posting a region-leading 9 percent increase in the number of homes sold compared with the same period a year ago. Sonoma County registered a 6 percent year-over-year increase in sales, followed by San Francisco County (+3%) and San Mateo County (+2%). Solano County (-6%) experienced the largest annualized decline in sales.

Short sales and bank-owned properties continued to provide excellent opportunities for homebuyers with patience while putting slight downward pressure on home prices. Median sales prices trended slightly lower on an annualized basis in all nine Bay Area counties – although Napa County’s median price was down only .3 percent for the year and six other counties experienced median price declines of 4 percent or less. San Francisco and Sonoma counties recorded the most significant median price declines from the year-ago period at 9 percent.

The average number of days a Bay Area home was on the market prior to sale remained essentially unchanged at 73 days in the first quarter. Locally, average days on market figures ranged from a low of 54 in San Francisco County to a high of 117 in Marin County. A year ago, the low stood at 45 days and the high was 129 days.

Looking ahead to the peak homebuying season, Bay Area homebuyers should continue to benefit from favorable pricing, although many competitively priced properties will draw multiple offers – some of them for all-cash. Both sales activity and median prices should remain steady absent any major changes in the state or national economic outlook or interest rates.

About Better Homes and Gardens Mason-McDuffie Real Estate

Our heritage began with the founding of Mason-McDuffie Real Estate in 1887. In 2009, the company was named the 19th largest real estate services firm in the nation, and Number One in the San Francisco East Bay. The company provides comprehensive solutions to home buyers and sellers, and handled more than 7,300 transactions in 2010, generating $2.9 billion in sales. Better Homes and Gardens Mason-McDuffie Real Estate is independently owned and operated and includes joint ventures with partners J F Finnegan Realtors, Highland Partners in Piedmont, Wine Country Group in the north bay, and Tri-Valley Realty in Pleasanton-Hopyard and Ruby Hill. The organization is comprised of more than 2,000 sales professionals in 40 offices. For more information, go to http://www.bhghome.com.

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Article source: http://www.prweb.com/releases/2011/5/prweb8360770.htm